Should I include my mortgage in my payoff plan?

Generally no. A mortgage is usually lower-interest debt than credit cards or personal loans. Focus avalanche or snowball methods on high-interest consumer debt first.

Can I combine both methods?

Yes. Some people pay off one or two small balances first for motivation, then switch to the avalanche method for the remaining higher-rate debts.

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United States & Canada · Debt

Debt Avalanche vs Debt Snowball: Which Pays Off Debt Faster?

6 min read · Debt · Strategy

Educational information only: This article is general information for learning. It does not replace guidance from a qualified professional who can review your full situation.

If you carry multiple debts — credit cards, personal loans, car payments — you need a strategy for paying them off. Two methods dominate personal finance education: the debt avalanche and the debt snowball. Both can work. They just prioritize different things.

The difference comes down to this: do you want to optimize for math, or optimize for psychology? Neither is wrong — the best method is the one you will actually stick to.

The Debt Avalanche

The avalanche method targets your highest interest rate debt first, regardless of balance size.

Here is how it works:

List all your debts by interest rate, highest to lowest
Pay the minimum on every debt
Direct every extra dollar to the highest-rate debt
When that debt is gone, roll its payment to the next highest rate

Why it works mathematically: Interest compounds daily on most consumer debt. Eliminating the highest-rate debt first reduces the total interest you pay over time. Depending on your balances and rates, the avalanche can save hundreds or thousands of dollars compared to the snowball.

The Debt Snowball

The snowball method targets your smallest balance first, regardless of interest rate.

List all your debts by balance, smallest to largest
Pay the minimum on every debt
Direct every extra dollar to the smallest balance
When that debt is gone, roll its full payment to the next smallest

Why it works psychologically: Eliminating a debt entirely — even a small one — creates a genuine sense of progress and momentum. Research by Dr. Keri Kettle at the University of Manitoba found that people who paid off smaller debts first were more motivated to continue and ultimately paid off more debt overall. Motivation is fuel.

Which One Should You Choose?

Choose Avalanche if…	Choose Snowball if…
You have high-interest debt (20%+ credit cards)	You have many small balances across multiple accounts
You are motivated by numbers and optimization	You need quick wins to stay motivated
Your debts are similar in size	Your highest-rate debt also has the highest balance
You have a solid financial foundation	You have struggled with debt before and need momentum

The One Rule Both Methods Share

Automate your minimum payments on every debt. Missing a single payment can trigger penalty APR (often 29.99%), wipe out months of progress, and damage your credit score. Set every debt to autopay the minimum before you start throwing extra money at your target debt.

What to Do After You Become Debt-Free

The day your last high-interest debt hits zero, something important happens: all the money you were spending on debt payments becomes available to redirect. Do not let lifestyle inflation absorb it. Set up an automatic transfer to your investment account — for the exact same amount you were paying on debt — immediately.

A $400/month debt payment eliminated could become $400/month invested. At a 7% assumed annual return over 20 years, that would be about $207,000 — from redirected debt payments alone. Use the Investment Calculator to run your own numbers with different assumptions.

Once you are debt-free, take our free financial plan tool again — your recommended plan will change completely.

Frequently Asked Questions

Generally no. A mortgage at 3–6% is usually considered lower-interest debt. Depending on your risk tolerance and goals, the math may favor investing extra money instead of paying off a low-rate mortgage early. Focus the avalanche or snowball on high-interest consumer debt — credit cards, personal loans, and anything above 8% APR.

Yes. A popular hybrid approach: pay off one or two small balances first (snowball) to clear mental overhead, then switch to the avalanche for remaining debts. The most important thing is to pick a method and execute it — perfect optimization matters far less than consistent action.